Why Is DirecTV Leaving Venezuela?

DirecTV just closed its Venezuelan operation and the reason seems to lie somewhere between chavismo and U.S. sanctions. Why is this happening? Where do we go from here?

AT&T, the owner of DirecTV, announced this morning that it closed its pay-TV operation in Venezuela. As a U.S. company, it’s impossible for AT&T to comply with both the U.S.-imposed sanctions and the Maduro regime’s minimum requirements to provide services in the country.

The sanctions imposed by the U.S. Office of Foreign Assets Control last year don’t prohibit AT&T from providing its service to Venezuelans, but they do prohibit the company from negotiating or having business with the regime or sanctioned entities. DirecTV had no other option but to drop channels tied to the regime from its grid. At the same time, the regime’s telecommunications agency CONATEL required AT&T to maintain Globovisión—a sanctioned company—and PDVSA’s channels to continue operating in the country.

These were the legal arguments the company gave to support the decision to end DirecTV’s operations in Venezuela. But this story starts way before there were any sanctions.

If the toughest round of sanctions happened in August 2019, why is this happening now?

According to Luis Carlos Díaz, a Venezuelan journalist who specializes in communications, the U.S. gave AT&T some time to decide what action to take, but in December, the State Department put more pressure on the company to stop working with the regime.

What’s DirecTV’s reach in Venezuela? How many people have access to the service and who uses it?

DirecTV is the country’s largest cable service, with approximately 2 million individual accounts and 10 million users, according to Díaz. Since it relies on antennas and satellite signal, DirecTV reaches households that many other cable providers don’t. Venezuelans in the countryside, in slums, and in low-income neighborhoods can watch cable television just like big-city dwellers, even if they live in areas where open signal channels (like state-owned and propaganda-fed Venezolana de Televisión) aren’t available. Venezuelan journalist Eugenio Martínez said DirecTV used to have 45% of the pay-TV market. This means AT&T’s decision impacts many Venezuelans who now lost their way of receiving entertainment or information (during a pandemic that requires lockdowns).

What are the alternatives for Venezuelans? What can be expected in the future?

There’s a percentage of the population that may afford international streaming services, but it’s small, especially when compared to the millions that use DirecTV. Díaz and journalist Arnaldo Espinoza say Venezuelans may also start buying cable decoders in Colombia. But this would also require purchasing a Colombian subscription, and with it, abandoning Venezuelan channels. It would also require importing them in the middle of an economic crisis and a pandemic that has the entire world on pause. It’s likely that a new black market will emerge to sell international decoders and subscriptions, sort of what currently happens in Cuba. Venezuelans’ creativity amid adversity will reveal itself once again.

Does this mean that Venezuelans in the country can no longer watch cable TV, or any content from the U.S.?

Not necessarily. They can install other cable services in their homes or sign up for streaming services. But installing an antenna in a slum is very different to having cable service installed by one of the national companies. The latter option would require going to the neighborhood and breaking the walls of one or multiple homes—a situation that would be complicated with the gas shortage, the quarantine, and the economic crisis.

How can this situation be resolved? Do sanctions have to be lifted so we can watch DirecTV, or is the company closing its operations because it doesn’t have economic incentives to work in Venezuela?

The company closed its local DirecTV plant immediately, leaving 700 workers unemployed, and it isn’t likely that lifting sanctions would make the service come back. AP reported that AT&T has lost revenue in Venezuela over the years as the regime pushes to keep DirecTV prices low and cancel international channels. Venezuelans also pay in bolivars (around 0.15 dollars per month), so closing operations in the country won’t have a significant impact on the company’s finances.

What does this change mean? Is it a direct consequence of the sanctions?

The truth is that this change isn’t simply caused by the sanctions. It’s the epilogue of the regime’s long history against freedom of expression and information, hunting down international cable services and pay-TV.

The exile of cable TV networks from Venezuela started in 2002, when Chávez’s government began censoring CNN and the Colombian channel Noticias Caracol. In 2004, the government changed the law so CONATEL had more control over the channels, and demanded them to show state content like cadenas (mandatory broadcasts). Chávez then closed RCTV and RCTV International in 2007, and in the last decade we’ve seen the Maduro regime blocking CNN, NTN24, and Noticias Caracol.

So this is another case where the chavista regime wins and our people lose, although this time the U.S. does play a part—which has become more common in the U.S.-sanctioned Venezuela under Maduro.